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TRANSPORTATION 

THE GREAT PROBLEM 

Suggestion for Its Solution by Government Aid 
to the Railroad , Leaving Sufficient Govern¬ 
ment Control Without Operation of 
Railroads by the Government . 

By WILLIAM J. COOMBS. 

n 


“Why, if—as in the case of the Panama Canal—it is 
legitimate for the Government to construct a water way 
through land for strategic reasons, and in aid of commerce 
—through which any citizen or company can, upon paying 
toll and complying with strict regulations, convey its boats 
or barges—is it not just as legitimate and feasible for it to 
construct 


A STEEL WAY OVERLAND 

upon which any railroad company, new or old, any cor¬ 
poration or private individual, can convey a car or train 
of cars to a desired market, and over which it could trans¬ 
port its armies and supplies in time of war?” 


PUBLISHED BY 

THE ALLIED PRESS 

35 NASSAU STREET, NEW YORK 






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W ILLIAM J. COOMBS, author of the constructive suggestions contained in 
this paper, is a publicist who for decades has held high national rank. He 

achieved much during two successive congressional terms; and, appointed by 
President Cleveland, as Government Director of the Union Pacific Railroad, he 
brought out of a complication (almost universally regarded as unsolvable) a solution 
that gave him eminence both as a financier and diplomat—realizing for the United 
States Government upwards of $125,000,000 from “claims” thitherto appraised as 
virtually valueless. In other activities he has won similar triumphs. And into 
he puts the seasoned results of study and devoted labor covering 



Mr. Coombs—still alertly active in business—is President of one of the prominent 
Savings Banks of Greater New York, in close touch with every public interest 
development; and any communication,—approving or critical—from readers of these 
pages will have his appreciative attention—Mr. Coombs’ address being No. 63 South 
Portland Avenue, Brooklyn. 


THE ALLIED PRESS. 


















* 



































FOREWORD 


In a country of such vast extent as ours, 
transportation is the problem underlying all 
our prosperity ; and with us, transportation 
means railroads, as no important nation is so 
inadequately supplied with internal water 
transportation as the United States. On the 
entire Atlantic Coast we have but one impor¬ 
tant river that reaches the ocean—the Hudson; 
on the gulf coast there is only one—the 
Mississippi; and on the Pacific Coast not one. 

The following paper was written and ready 
for publication previous to the order that was 
issued by the Government taking over the 
control of the railroads and coal of the coun¬ 
try. The very fact of the necessity of this 
action on the part of the government em¬ 
phasizes the importance of the proposed plan. 

Secretary McAdoo in a statement just issued 
recognizes the fact that at the end of a period 
(not yet determined) the government will re¬ 
turn the management of the roads to their own¬ 
ers in a condition that will enable them to re¬ 
sume profitable operations. This, he states, will 
entail a large expense to the government. 

Would not the building of new trackage by 
the government, of which the railroads could 
avail themselves, go far to solve this problem, 
while at the same time it would add permanently 
to the transportation facilities of the country? 

While I recommend that the government, 
by the building and permanent ownership of 
supplemental trackage, shall aid the existing rail¬ 
roads in reestablishing themselves in better serv¬ 
ice, I am unalterably opposed to government 
management of the railroads, as it would put in 
the hands of any Administration so large a 
patronage that it would tend to disorganize our 
democratic government. 

WILLIAM J. COOMBS. 


February 27, 1918. 



Suggestion of Plan for Solving the Problem of 
Ample Transportation by Government Aid 
and the Retention of Sufficient Govern¬ 
mental Control , Without Its Operating 
the Railroads and Interfering with 
Vested Interests. 


By William J. Coombs, 

Banker and Publicist—Member of the Fifty-second and Fifty-third Congresses, 
and Former Government Director of the Union Pacific Railroad. 

I N FEBRUARY, 1904—discussing the recent decision of 
Congress to construct a canal across the Isthmus of 
Panama as a Government enterprise instead of a pri¬ 
vate one—I urged public approval of it for the following 
reasons: 

1. It established a more perfect union be¬ 
tween our Atlantic and Pacific States, enabling 
us to transfer our navy from one coast to the 
other without the tedious and dangerous voy¬ 
age around the Horn, thus avoiding the neces¬ 
sity of duplicating it. 

2. It had become a strategic necessity 
since the construction of the Suez Canal and 
the Trans-Siberian Railroad. 

In commenting upon the advantage of government 
construction, I said: “In case the investment proved un¬ 
profitable, commercially, the Government could look upon 
the loss of revenue with equanimity in view of its bearing 
upon the general prosperity of the country, as well as upon 
its strategic value, also that it must be admitted that in 
all of its construction, under its own engineers, the work 
has been more satisfactory, and carried on with less waste¬ 
fulness than that of corporate enterprises. 

7 



Using tliis as a text, I said: “Why, if—as in the case of 
the Panama Canal—it is legitimate for the Government 
to construct a waterway through land for strategic rea¬ 
sons, and in aid of commerce, through which any citizen 
or company can, upon paying toll and complying with 
strict regulations, convey its boats or barges, is it not 
just as legitimate and just as feasible for it to construct a 
STEEL WAY OVERLAND upon which any railroad, 
new or old, any corporation or private individual, can con¬ 
vey a car or train of cars to a desired market, and over 
which the Government could transport its armies and sup¬ 
plies in time of war.” 

At that time there were no signs of war, but in view 
of its possibility, I said: “While our policy as an agri¬ 
cultural and manufacturing people should always be for 
peace, we are not without warning that our very promi¬ 
nence in these respects may at any time bring us into con¬ 
flict with other powers in the contest for markets for our 
products. We are forced to abandon our attitude of fan¬ 
cied isolation, the working out of our destiny along our 
own lines, and in our own way. Our great prosperity and 
resources have made us a disturbing factor in the world’s 
arena, and we must prepare ourselves for participation in 
the great movements in which the nations of the world 
are involved.” 

In 1904 commerce was disorganized on account of the 
great congestion of freight, owing to the inefficient man¬ 
agement of the railroads in the hands of speculating syndi¬ 
cates, which had disorganized them through costly reor¬ 
ganizations and consolidations. Rebates in favor of 
favored industries were the order of the day. 

I will not waste time in describing conditions that 
must be fresh in the memory of business men. 

The efforts of the Interstate Commerce Commission, 
which was Anally clothed with unlimited power, even to 
the deciding upon freight rates, has not improved condi¬ 
tions, although it has succeeded in throwing off the para¬ 
sites, and left the management in the hands of experienced 
railroad men. 


8 


I shall not attempt to discuss the wisdom of the policy 
of the Commission, but only point to the fact that under 
its control the existing roads have steadily decreased in 
efficiency, and very few new ones have been built to meet 
the growing needs of the country. 

Private Capital’s Present Impotency. 

In fact, under present conditions the ability of private 
capital to construct new roads is more than doubtful. This 
potential fact was emphasized by the late James J. Hill 
in an address delivered in Minnesota, wherein he stated his 
belief that in the United States there was not enough capi¬ 
tal—available for the purpose—to build sufficient lines 
to meet existing and increasing public necessities. 

We now find ourselves involved in a world-wide war 
with not more than half enough transportation facilities 
to meet our wants. The transportation of our armies, 
munitions and supplies must be added to and take prece¬ 
dence on our crippled railroads. 

With our Western granaries overflowing with wheat, 
and our mountains bursting with coal, our people are suf¬ 
fering from hunger and cold. 

We must fight our way through this terrible war 
crippled to the point of danger. I, therefore, venture to 
again present a plan of the building by the Government 
of a great railway across the continent—not necessarily 
for its own operations, but as a road bed for all existing 
and future railroads and land transportation companies. 

In case our Western coasts are ever threatened by 
Trans-Pacific powers, it will be absolutely necessary for 
the transportation incident to war. 

One of Germany’s most efficient instruments in this 
war is her splendid system of railroads. 

One Route Immediately Beneficial. 

I offer a suggestion as to the route of the first GREAT 
TRANSCONTINENTAL STEEL WAY. 

Tn order to state the proposition more clearly, let us 

9 


suppose that Congress decided to undertake it. For pur¬ 
poses of illustration we will suppose that the first roadbed 
built would begin at the Atlantic seaboard in the neigh¬ 
borhood of the 40th or 41st parallel—passing westward 
through New Jersey, Pennsylvania, Ohio, Indiana, Illinois, 
Missouri, Nebraska, Colorado, Nevada and California, all 
of that parallel, or as nearly so as physical conditions 
would permit, to the Pacific Coast. This route w r ould give 
access to Pennsylvania’s anthracite and to the West Vir¬ 
ginia coal fields. 

Later another road could be constructed, to begin at 
a point near the 78th longitude, where it would be joined 
by a road passing through West Virginia to Washington, 
and another going northeast through Connecticut and 
Massachusetts to Maine; also at a point near the 108th 
longitude in the State of Colorado by a road leading north¬ 
east through Idaho, Montana and Washington on Puget 
Sound. 

This route would penetrate the anthracite and bitu¬ 
minous coal regions, reach the wheat, corn and mineral 
belts, as well as go into large manufacturing sections, 
and would supply a route for the increasing trade of the 
awaiting Orient. It would touch the southern bounda¬ 
ries of the Great Lakes, which would be the natural feeders 
to it. Every road forming a connection with it would 
have all the advantages of a trunk line to the Atlantic 
and Pacific seaboards. 

At the present time all local roads supplying the wants 
of particular sections which depend upon them for their 
access to markets are at the mercy of the trunk lines for 
access to the great markets. Traffic arrangements, except 
in a few cases where there is competition, can be and are 
made so difficult that their trade is made unprofitable for 
through freight, necessitating high rates for local traffic, 
or absorption into the large lines. If such local roads 
could, after reaching the great National Steel Way, send 
their own cars through to the great markets, they would 
be able to sustain themselves in an independent existence, 
and the sections of the country served by them would be 

10 


Oil a basis of equal privileges. Can it be doubted that 
many neAv roads extending north and south of the main 
line would be built and new areas of the country opened 
up to settlement and commerce? It is certain that the 
absorption of weak lines by powerful competitors would 
be stopped. 

An equally effective road should, and doubtless would 
be devised for the South, to supplement the river systems 
and make more effective the improvements paid for by the 
general government of the navigable waters of the states, 
and provide for their increasing commerce. 

The construction of such roadbed should be solid, sub¬ 
stantial, ample in its facilities to meet the requirements 
of the future, with every modern appliance. Sufficient land 
should be acquired in th© beginning to provide for any 
number of tracks and sidings that may be required—tracks 
for fast trains, other tracks for slow trains, the number 
to be determined as the business of the road is developed. 
The road thus built need not touch cities or have expen¬ 
sive terminals upon its routes, as it would attract feeders 
from every town and city. 

Of course, any plan, devised for the great trans¬ 
continental road-bed, must also provide for terminals on 
a most liberal scale, for existing roads are, as all know, 
handicapped and hindered in their service by insufficient 
terminal arrangements. If the neighborhood of New York 
should be chosen, a proper arrangement of our great harbor 
could, I believe, be made. It should include the New Jersey 
meadows, which could be converted into a great basin for 
the use of lighters and warehouses. The Staten Island 
shores, the North and East Rivers and the Brooklyn shore 
could all be brought into a readily conceived plan. But 
if any other city has superior facilities, it should be chosen; 
or the railroads be divided before reaching New York and 
include Philadelphia and Baltimore in this system. 

Who Shall Use This Steel Way? 

Its use shall not be restricted, but free and open to all 
who will pay the required uniform tolls and comply with 

11 


uniform regulations as to equipment, power, speed and 
safety appliances. 

Any railroad company, great or small, any transporta¬ 
tion company, any farmer, manufacturer or private in¬ 
dividual should have equal privileges, but none shall have 
special advantages. It should in fact be a great highway 
for the people, as free as the ocean, built by the people 
for the use of all the people, and controlled by their repre¬ 
sentatives. 


Tolls and Government Advantages. 

There is no doubt that a road of the kind, honestly built 
and paid for out of the proceeds of low interest bearing 
bonds could exist with a lower rate of toll than those 
built under the plan now existing from proceeds of bonds 
bearing a higher rate of interest sold through syndicates 
under par—with bonuses of donated stock. The tolls upon 
the Government roads should never be larger than suffi¬ 
cient to cover the cost of maintenance, renewals, interest 
on bonds, cost of administration and one-half of 1 per 
cent, per annum as a sinking fund to retire the bonds. 

It would enable the Government—with an instru¬ 
mentality under its immediate control—to perform its 
constitutional duty to regulate commerce between the 
States. It has attempted to do it through the Interstate 
Commerce Commission and failed. How can commerce be 
more effectively regulated than by arranging for uniform 
and serviceable facilities subject to compliance with rules 
strictly enforced under Government regulation? 

It Tvould provide facilities for more economical and 
independent service in transporting the mails as well as 
the army and army supplies. 

With the extension of our domain to the Pacific and 
the Orient, the rapid transportation of troops, guns, am¬ 
munition and stores is a matter of vital importance, justi¬ 
fying unusual methods to accomplish it without interfer¬ 
ing with the regular commerce of the country. 


12 


Present Vested Interests Not Endangered. 

I desire especial emphasis to be placed upon my state¬ 
ment that in any new arrangement for increasing national 
railroad facilities to meet the certain needs of the future, 
proper care must be taken to hold harmless all legitimate 
vested interests—or, in other words, that existing roads 
must not be ruined, must not be hurt, by facilities fur¬ 
nished by the Government. 

In considering this point it will have to be admitted 
that the main lines likely to be affected by it have their 
facilities taxed to the utmost, and that the real and press¬ 
ing question is whether, in providing for the increased 
traffic of the future, it shall be left to them to build in¬ 
creased trackage or whether such increase of roadbeds 
shall be built under the auspices of the general govern¬ 
ment. 

In common with all other transportation companies 
they would have the right to use the Government tracks in 
carrying their excess freight—and would retain all the 
advantages of experience and an established clientele. 

All the small roads struggling for existence, many of 
them paying no dividends to stockholders, would be bene¬ 
fited in that it would give them the right of way at reason¬ 
able rates over the Government tracks to the great markets. 

During the years in which THE PEOPLE’S STEEL 
WAY was being constructed the great roads would adapt 
themselves to the new conditions, and the weak roads 
would find the greatest incentives to maintain their auton¬ 
omy. 

The Expense. 

The expense of building such a road-bed would mani¬ 
festly be enormous, but the burden of it would not be 
greater than that of the building of the Union and Central 
Pacific roads in 1863, when the country was divided by 
civil war, while at the present time we go into the project 
with a united people and with vastly increased prosperity 


13 


and resources; furthermore, the building of the proposed 
line would be more economical as the extravagances in¬ 
volved in the construction of the above named roads would 
be avoided. 

The expense need not be considered as a whole at the 
beginning, as it would require several years for its con¬ 
struction, also its benefits would begin to be felt with the 
completion of the first two hundred miles, as it would solve 
the problem of the control of coal, and every additional 
mile constructed would bring relief to farms and factories. 

We must have relief, and that as quickly as possible. 
The people are suffering from lack of necessary food and 
coal. Our industries are crippled by the shutting down 
of our factories, involving daily losses of untold millions. 
Our future is imperilled and made uncertain. We cannot 
rely upon our railroads with any certainty for relief—it 
must come through aid extended by the government. 

The above suggestions have been made, I hope, with due 
modesty and with a firm belief in their value. If, in doing 
so, I have stimulated others to suggest a better one, I shall 
indeed be satisfied. 




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r* IVILIZATION, PROSPERITY, 
and increase in the Rewards 
of Labor, keep step with increasing 
Transportation. 


HI56 74 578 






























































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